Villar firms bribe and forge? The case of the undervalued crane

MANILA, Philippines – Customs officials were peppered with
calls in 2009 to release a shipment that was confiscated because they
were undervalued

In an interview with Newsbreak, they said they were not aware that
the confiscated shipment belonged to “people connected with a high
official.”

They were referring to callers from companies associated with presidential aspirant Manuel Villar, Jr.

The shipment contained a tower crane, an equipment used in the
construction of tall buildings. Real estate spawned the much-touted
wealth of Villar, the only billionaire among elected officials.

The tower crane was imported by MGS Construction Inc, a subsidiary of MGS Corporation,
which is engaged in land development, ready mix concrete and housing
construction. These companies were behind the development of real
estate projects of Villar’s companies, like C&P Homes, Britanny
Corp. and Crown Asia.

There is no direct link between MGS Corporation and Villar’s companies but MGS’ president and chief operating officer, Marcelino Mendoza,
is part of the core group of select executives managing Villar’s real
estate companies. He has been with the Villar Group since 1992, serving
as president of key money makers, like low-cost housing builder C&P
Homes and Communities Philippines, which builds homes outside of Mega
Manila. He is also the current chairman of Villar’s flagship firm Vista Land and Lifescapes, which is listed in the local stock exchange.

Confiscated

Newsbreak double-checked Mendoza’s claims on the customs issue
against other documents and interviews with customs officials. We found
that the imported crane was undervalued to reduce the customs duties
that MGS would have to pay by almost P2.2 million.

Based on Bureau of Customs records obtained by Newsbreak, the
Presidential Anti-Smuggling Group seized 6 container vans that arrived
at the Port of Manila from Hongkong in Oct. 2008. They had a tip that
the imported items were undervalued.

The commercial invoice stated that the dutiable value of the
shipment consigned to MGS Construction was only $46,250 (est. P2.2
million).

However, upon verification, the dutiable value was actually $185,000 (est. P8.7 million), or about P6.5 million more.

MGS denied knowledge of the fraud, blaming its customs broker Elen
de Vibar Pasion, for the mess. It also argued that the confiscated item
was second-hand material, thus has a cheaper value.

The cheaper the value of the imported material, the cheaper the customs tax.

Bribery, forgery?

Mendoza, in his labor complaint, alleged that Villar’s senior officers bribed certain Customs officials to secure falsified documents to support an appeal.

He found out the falsification when told by then acting chief of the
appellate and ruling division, Atty. Grace Tecson-Malabed, that the
signature of Customs Deputy Commissioner Reynaldo Umali in the
endorsement letter to release the container vans was forged.

Mendoza said he confronted Villar’s senior officer behind the
forgery, who admitted to him that it was provided from a BOC insider in
exchange for P100,000.

The bribery, however, bungled.

One of the Customs officials told Newsbreak that it would be
difficult to release the shipment without arousing suspicion from the
apprehending PASG officials. “The PASG has the documents that showed
the undervalued invoice.”

Failing to corrupt Customs officials, MGS Construction was
reportedly forced to submit the corrected invoice and seek settlement.
It offered to pay P890,695.60 for the import taxes as initially
computed by the BOC

However, a re-computation by Import and Assessment Service unit said
that the actual duties should be P3.067 million as the items were brand
new. The unit also included fines and penalties. On June 2009, Customs
Commissioner Napoleon Morales signed the disposition form.

In October 2009, MGS Construction paid the corresponding amount.

Concerned Customs officials fear that they would lose their jobs if
Villar wins. “we expect his men not to forget,” one source said. – - With reports and additional research from Ma. Althea Teves and Purple Romero (abs-cbnnews.com/Newsbreak)